Up north, morale, and respect for the government, continues to decline. For over half a century, the communist government had successfully brain washed the population into believing that North Korea was a workers' paradise and the rest of the world sucked. This attitude even survived the great famine of the 1990s (that killed over five percent of the population and left a third of the children with stunted growth). But the currency devaluation last November, which wiped out the savings of so many North Korean entrepreneurs, was different. After the 1990s, the government allowed a bit of capitalism, in the form of free markets. At first, these were mainly to distribute food supplies more efficiently. But soon the markets contained, well, everything. The old-school communists in the government disliked this, and started shutting down the markets. The currency switch last November was intended to finish off this potentially troublesome middle class, but instead it caused a general collapse in support for the government and the ruling family (Kim Jong Il and his clan). People now openly criticize the government and Kim Jong Il. Bravery borne of desperation is the order of the day, and the secret police and prison camps aren't so scary anymore. This has made the ruling elite very nervous. A few percent of the population lives well, while everyone else suffers. The elite have the guns, but not the numbers and, worst of all, they are no longer scary. At the moment, the situation is quiet up north. Too quiet.
The UN has admitted that most of the worlds nations do not enforce UN sanctions on North Korea (or most other nations). If the sanctioned nation is discreet and willing to bribe the right people, the sanctions can be circumvented. Energetic efforts by Western nations that do enforce the sanctions, tend to create unpleasant diplomatic situations when sanctions evasion is uncovered.
As a result of the sinking of the South Korea corvette Cheonan last March, a South Korean government oversight agency has recommended that 25 senior military officers and officials be punished. This made public long standing complaints (by South Korean and American military officials) that the South Korea military leadership had gotten complacent and sloppy. Now these accusations are out in the open, and action is demanded. Action may not be forthcoming, as the generals tend to protect each other, no matter what. It's an old problem in South Korea, and North Korea as well.
June 10, 2010: A South Korean Naro-1 satellite launcher rocket exploded after launch, with debris falling into the water off the southern coast of Korea. The Naro-1 components are Russian, but the rocket was assembled in South Korea. There was a similar launch failure last year. South Korea has launched ten satellites using launch services from other nations, but wants to join the small club of nations that can build their own satellite launcher rockets. South Korea has been buying such technology from Russia.
June 8, 2010: A June 4th shooting of four Chinese civilians, on the North Korean border, has become a major issue. As word of the incident, which left three Chinese dead and another wounded, spread in China, the Chinese government was forced to go public, and demand a public apology from North Korea. The four victims were in a boat, on the Chinese side of the Yalu river, when the North Korean border guards opened fire. The North Korean border guards have been rather more trigger happy of late, as they are under pressure to stop people from escaping, or smuggling goods out of North Korea. A particular irritant to North Korea is the high price of scrap copper in China, and the subsequent rampant theft of copper in North Korea. This is often taken from closed factories (most of the nations' factories are closed because of electricity shortages and general mismanagement), which renders these facilities in need of expensive repairs if they are ever to reopen. Border guards have orders to shoot to kill if they spot anyone trying to get copper wire out of the country. But they are only supposed to shoot North Koreans. The June 4th incident was a case of mistaken identity. That doesn't happen often, because Chinese, even those of Korean ancestry, appear better fed and dressed than North Koreans. But this time, the border guards screwed up, and China wants their heads, and a public apology. The former is possible, the latter less so.